Evening trading US shares

[Mr. Charts]

Here's why I trade momentum shares.
Obviously this does not mean that you don't trade safely, it means you seize the opportunities the market offers and control your position with great care.

Long on the X hairs as AMZN, trending strongly, went back above 59.
I exited at the time of the screen shot a few minutes ago for +$3.56, that's $3560 profit for a 1000 share size although again I'm training my brother so only 800 shares = $2848
This is the name of the game.
Momentum = more profit.
Lack of movement = reduced profits.
There are many ways to make money in the market.
Nothing is right or wrong as long as it works and suits your personality.
Richard.

 

[Mr. Charts]

Forgot the chart - taken at the exit.
Richard

 

[Grey1]

.
Momentum = more profit.
Lack of movement = reduced profits.
Nothing is right or wrong as long as it works and suits your personality.
Richard.

Did you say Momentum = more profit.. Heheh so why donot you play earning every night after hour ? This way you have super momentum every night Richard,, I am shocked by the Momentum = More profit statment.. of course going to a bank with the gun is much more profitable but what about RISK side of the momentum trading .

SO if i say to you going to bank with GUN = More profit would you consider this as an intelligent statement ,, WHAT ABOUT RISK ADJUSTED RETURN CONCEPT IN FINANCE. ? do you think we should throw it all out of the window ?


The statement above is naive and dangerous and to be quite honnest an insult to professionals.

For god sake don't take this as a personal attack ,, because I am not into that..

PS:-- This link is first step in the right direction

http://www.finportfolio.com/education/tutorial/tutorial_risk-adjusted_return.html


Grey1

 

[The Beyonder]

Lovely trade Richard

I entered long as it broke above $58.50 just before 6pm but it didn't move up then so I got out for b/e.

Miffed that it later went well above $60.

 

[Mr. Charts]

Thanks, The Beyonder.
I agree with you completely, if something does not do as it "should", exit in the worst case scenario for the minimum loss, but preferably for no worse than break even. If something moves into profit on momentum readably but then fails, then exit with some profits.
I had a situation like that in a potential RTN reversal this afternoon and exited for a scratch trade.
I tend to find that a higher %age of trades fail during the US lunch time so I rarely trade between 5.30pm and 6.45pm UK time. Of course, if you've been trading the afternoon session and are looking to trade in the evening, you need a break anyway.
Richard

 

[dvdh]

Did you say Momentum = more profit.. Heheh so why donot you play earning every night after hour ? This way you have super momentum every night Richard,, I am shocked by the Momentum = More profit statment.. of course going to a bank with the gun is much more profitable but what about RISK side of the momentum trading .

SO if i say to you going to bank with GUN = More profit would you consider this as an intelligent statement ,, WHAT ABOUT RISK ADJUSTED RETURN CONCEPT IN FINANCE. ? do you think we should throw it all out of the window ?


The statement above is naive and dangerous and to be quite honnest an insult to professionals.

For god sake don't take this as a personal attack ,, because I am not into that.

PS:-- This link is first step in the right direction

http://www.finportfolio.com/education/tutorial/tutorial_risk-adjusted_return.html


Grey1

Grey1,

why are you always saying that momentum trading is dangerous. There's a plan behind it just like you have one for your style of trading.
For momentum traders: Momentum = more profit and lack of movement = less profit! What is so hard to understand about that?
Your statement above is also naive and an insult to professional momentum traders.

Because you have a profitable trading method, that doesn't mean it's the only one that works. There are also ways to make money trading intraday momentum without a VWAP engine or some sort of program trading strategy. I just wanna say it's a little sad that you imply that your way of trading is the only one that works! And don't say that you don't imply that, because I think many here would agree with me.

And this is not a personal attack! Just my opinion. Don't get me wrong.I think you're doing a great job, making money the way YOU trade!!

-Dave

 

[yacarob1]

Nothing is right or wrong as long as it works and suits your personality.

Agree with this comment totally especially the reference to personality.

I am by nature an impatient person so I need to trade relatively fast movers which will give me an acceptable amount of profit in as short a time span as possible.

And I seek out and trade shares that will do this for me.

These often tend to be the US$ 100 per share plus brigade.

Also agree with Dave above.

There are many ways to trade successfully and much can be learnt from the different methods. You can draw on various specifics within these methods and apply them to your own way of doing things.

I also tend to pick up on comments posted on these boards by people like Mr Charts et al. I chew them over and often apply them to my own situation with great benefits.

Grey1, I especially like listening to what you have to say and if you single out particular stocks, then I track them carefully.

The utterances of you guys are great and I find I can draw enormous benefits from them.

Thank you.

 

[PitBull]

This has been debated before.

Let's put it into perspective.

For example:

grey1 style, typical OB and OS situation on high ATR stock,just for illustrative purposes and IMHO, max target=50cents, max stop=25 cents, share size 2000 therefore risk $500, profit $1000. RR 2:1

Mr Charts style, momentum trades based on news etc, target $1, stop 10cents, share size 1000, risk = $100, profit $1000 RR 10:1

However, to assume the same risk as Grey1 of $500, Mr Charts could trade 5000 shares and the profit would be more, e.g. 5000

So, IMHO trading 2.1 risk reward can be dangerous if you take a few losers, whereas trading a 10.1 risk reward helps your bottom line as the damage after a few losers is less.

Also, the Risk Adjusted Return must be better Mr Charts way, as you risk $100 to make $1000 instead of risking $500 to make $1000

Regards
Lee

 

[yacarob1]

An RR of 10:1 has got to be preferable as you only have to get it right 9.1% of the time to break even.

That, in my book is pretty easy.

 

[Mr. Charts]

timaru,
You have received one reply suggesting a possible reason why your trade suddenly went pear shaped.
Here is what I saw when I did some actual research for you:
I looked at the first ten stocks in alphabetical order in the Dow 30.
This is a sample of 33% and is statistically large enough to draw high probability conclusions, although nothing is ever 100% certain in the markets.
There was no sell off in price at the time in any of those ten stocks and there was no unusual volume movement either.
In addition there was no adverse movement in the Dow, the S&P or the Nasdaq markets at that time.
I would have said the following without even doing any research for you as my experience has been consistently in line with it.
There was, on the facts examined, no proof or evidence to suggest any overall market influence.
Somebody, individual or corporate, decided to offload/short stock in that company at that moment and that was the cause of the sudden fall. You are not at fault whatsoever in not foreseeing the event; it was just bad luck. Occasionally it will happen and is part of the business. It's the territory we work in.
I hope you find the above useful.
It is factual.
KInd regards,
Richard

 

[Grey1]

I just came back home . I will reply to above posts after the trading hour , But now I need to make $$$,,

grey1

 

[timaru69]

timaru,
You have received one reply suggesting a possible reason why your trade suddenly went pear shaped............................

......................I hope you find the above useful.
It is factual.
KInd regards,
Richard

Hi Richard, Grey1 and others.

First of all thanks for your replies, much appreciated.

Re "EXC"

Grey1 thanks for your reply and observation

I put this example up as most trades that have been posted here are profitable and I thought that this was an interesting case as it was a first for me. i.e this was the first time that I was in a trade and have had this happen.

I must admit that I looking at OS and OB conditions of market would only confuse me . When I took this trade I had already made my money for the day so wasn't overly worried re the loss.

Richard

Thanks, just as I had suspected I got out as soon as the spike went against me and it proved to be the right thing to do. Given most of my losses are small then the odd 25c won't kill me.

Thanks

Andrew

 

[Grey1]

Grey1,

why are you always saying that momentum trading is dangerous. There's a plan behind it just like you have one for your style of trading.
For momentum traders: Momentum = more profit and lack of movement = less profit! What is so hard to understand about that?

This is the problem,, What is amount of profit got to do with MOMENTUM in an instrument..? Nothing Zero zilch .. .

10 000 shares * 10 c = 100shares * 1000 Cents ( for the sake of argument) so there is zero difference )

is it riskier to trade 10 000 shares or 10 shares ? of course not ,, it is irrelevant, Number of shares is relative to your capital hence my argument above.. You should know that because you claim you execute 10 000 of apple ( as you said in your previous posts )

There for MORE MOMENTU = MORE PROFIT is rubbish .. Now you know why I have problem with this statement..?

Your statement above is also naive and an insult to professional momentum traders.

Because you have a profitable trading method, that doesn't mean it's the only one that works. There are also ways to make money trading intraday momentum without a VWAP engine or some sort of program trading strategy. I just wanna say it's a little sad that you imply that your way of trading is the only one that works! And don't say that you don't imply that, because I think many here would agree with me.


-Dave

There are millions of ways to make money out of market and mine is just one of them ,,, How ever momentum traders NEED to know and understand the volatility and hence the risk hidden in a momentum play .(look at TIMURA post ,, 30 c fall in few second ) If you donot then your luck eventually runs out and you be a toast.

 

[Grey1]

This has been debated before.

Let's put it into perspective.

For example:

grey1 style, typical OB and OS situation on high ATR stock,just for illustrative purposes and IMHO, max target=50cents, max stop=25 cents, share size 2000 therefore risk $500, profit $1000. RR 2:1

Mr Charts style, momentum trades based on news etc, target $1, stop 10cents, share size 1000, risk = $100, profit $1000 RR 10:1

However, to assume the same risk as Grey1 of $500, Mr Charts could trade 5000 shares and the profit would be more, e.g. 5000

So, IMHO trading 2.1 risk reward can be dangerous if you take a few losers, whereas trading a 10.1 risk reward helps your bottom line as the damage after a few losers is less.

Also, the Risk Adjusted Return must be better Mr Charts way, as you risk $100 to make $1000 instead of risking $500 to make $1000

Regards
Lee

Lee,

Yes lets put it into perspective,, I have explained this few times before.

A 10 C stop and $1 target .. R:R = 10 I suggest even better strategy ..
Lets have 5C stop and $ 3 Target this would give you a R:R = 60 in fact why stop at R:R of 60 lets take more profit either by raising the target or reducing the stop to 1C

The problem is if you set a stop which does not consider the volatility envelope then you donot have a strategy.. you could try setting 10 C stops on momentum plays and you be stopped times and times on the trade noise. of course I have seen few traders with crystal ball who claim perfect entry in nearly 99% of the time lol ..

A trader only becomes a trader when he fully understands the risk concept ,, This is what i have live demonstrated to people who have been here.

You need to have a volatility model ( historical or projected model ) to define the risk of a trade before getting into the trade and hence setting the stop and adjusting your POSITION SIZE accordingly The projected models are used in option pricing but you can still use them for stock trading to get a possible envelope boundaries to define the risk of the trade
Now ,, it is up to you as a trader to really take notice of what I just explained as i mean to help you .

I also wish Mr Chart's brother loads of luck because he needs it. Richard took two trades as shown below both with 800 shares with a VAST difference in VOLATILITY /ATR and he preaches on correct position sizing .



http://www.trade2win.com/boards/attachment.php?attachmentid=26981

http://www.trade2win.com/boards/attachment.php?attachmentid=26903





Grey1

 

[timaru69]

There are millions of ways to make money out of market and mine is just one of them ,,, How ever momentum traders NEED to know and understand the volatility and hence the risk hidden in a momentum play .(look at TIMURA post ,, 30 c fall in few second ) If you donot then your luck eventually runs out and you be a toast.[/QUOTE]

Hi Grey

To be fair this is the first time I have seen this occur over the last 18 months that I have had access to the markets, hence why I posted. Of course I am sure that it does happen all the time.

Interested in knowing how you trade so will look at your posts tomorrow, I assume there is information on this site?

Each to his own

Cheers

Timaru69

 

[dvdh]

This is the problem,, What is amount of profit got to do with MOMENTUM in an instrument..? Nothing Zero zilch .. .

10 000 shares * 10 c = 100shares * 1000 Cents ( for the sake of argument) so there is zero difference )

is it riskier to trade 10 000 shares or 10 shares ? of course not ,, it is irrelevant, Number of shares is relative to your capital hence my argument above.. You should know that because you claim you execute 10 000 of apple ( as you said in your previous posts )

There for MORE MOMENTU = MORE PROFIT is rubbish .. Now you know why I have problem with this statement..?




There are millions of ways to make money out of market and mine is just one of them ,,, How ever momentum traders NEED to know and understand the volatility and hence the risk hidden in a momentum play .(look at TIMURA post ,, 30 c fall in few second ) If you donot then your luck eventually runs out and you be a toast.

What in the world does trade size have to do with the more momentum = more profit statement. Absolutely nothing. If you trade 10000 shares of aapl. and you take 10 cents when there's less momentum or you make 1 buck with 10000 shares and there's more momentum. You make more money taking that 1 dollar then the 10 cents. That's his point. And you can argue what ever you want, you're probably the only one that doesn't understand his point. This isn't about trading 1 share or a million. This is about momentum.
In Holland we have a saying. You should look a little further than the length of your nose!!! It's just funny that everytime the discussion is about outright momentum trading you want people to believe there's no money to make! Only because you don't believe in it.
You also stated that a TA pattern, Level II trader will eventually run out of luck.
I had an edge I lost in october last year, which I traded solely based on level II. I consistently made money every single day, with a few losing days which you can count on 2 hands! And you state it's just luck and I ran out of it. You must really have a short nose.
I'm doing fine again right now, and I'm consistent again, doing outright momentum trading based on chart patterns and volume. And luck is NOT involved.

You have every right to your express your opinion, so have I, so don't think I'm attacking you. This is nothing personal. We just don't agree with your statements!

-Dave

 

[dvdh]

I also wish Mr Chart's brother loads of luck because he needs it. Richard took two trades as shown below both with 800 shares with a VAST difference in VOLATILITY /ATR and he preaches on correct position sizing .



http://www.trade2win.com/boards/attachment.php?attachmentid=26981

http://www.trade2win.com/boards/attachment.php?attachmentid=26903





Grey1

The man could take 10000 shares without looking at your volatility/atr stuff. He knows where to exit when things go against him. If you predetermin a 10 cent loss or a 1 dollar profit, it doesn't matter whether you take 100 or 100000 shares, you just base the share size on the max. amount you want to lose and the volume the stock trades to not get too much slippage on the fill. It's very clear you have totally different risk management than we have. But in the end some momentum traders AND you make money. So what's the big deal. Again it sounds like you know the only CORRECT way of managing risk!

-Dave

 

[Grey1]

The man could take 10000 shares without looking at your volatility/atr stuff. He knows where to exit when things go against him. If you predetermin a 10 cent loss or a 1 dollar profit, it doesn't matter whether you take 100 or 100000 shares, you just base the share size on the max. amount you want to lose and the volume the stock trades to not get too much slippage on the fill. It's very clear you have totally different risk management than we have. But in the end some momentum traders AND you make money. So what's the big deal. Again it sounds like you know the only CORRECT way of managing risk!

-Dave

Dave,

Well , I have explained the Risk side of the momentum plays as simple as possible which you still have problem understanding it .. . No problem , I have no reason to explain further because the concept I refer to are mathematical , technical and fact . It is up to you to learn further . After all , it is your money and you can do what ever you want to do with it ..

Grey1

 

[dvdh]

Dave,
After all , it is your money and you can do what ever you want to do with it ..

Grey1

Very true

 

[Mr. Charts]

Spot on, dvdh.

Some readers may have noticed that the two links to recent trades of mine are on different timescales !!! One minute and five minute ! ;-)))

ATR, on the occasions when it might be a factor, are actually different on different time scales.
I assumed people realised that LOL !

Also I trust readers of the two views of timaru's trade, (posts #420 and 430), have examined the concepts in detail and compared and contrasted the approaches of myself and the other poster and made up their own minds on the actual evidence...........just because the overall market has a strong influence does not mean that every movement has, per se, to be the result of the overall market. Very many are not. Otherwise people wouldn't trade stocks, just the indices/futures. Quite obviously.

My brother and I enjoyed a great laugh this afternoon at the recent reference............;-)
Richard